You will usually use an estate agent to help sell your house.
Their expertise and experience can help you to find a buyer faster.
In return, they expect to take a percentage of the final sale price.
But how much commission do estate agents charge?
Keep reading to find out.
How much commission do estate agents charge?
Most UK estate agency commissions range between 1.5% and 3%.
However, this is just an average figure. You might find companies that are slightly higher or lower.
For example, the most ‘premium’ estate agencies in London might go up to 3.5% because they sell the most illustrious properties in the city.
The commission rate is significant – it can cost or save you thousands of pounds.
Example commission rates
For example, the amount taken off your selling price can vary in the following ways:
- For a £200,000 house, 1.5% is £3,000 while 3% is £6,000
- For a £500,000 house, 1.5% is £7,500 while 3% is £15,000
- For a £1 million house, 1.5% is £15,000 while 3% is £30,000
- For a £2 million house, 1.5% is £30,000 while 3% is £60,000.
As you can see, in the most extreme circumstances, tens of thousands can be on the line.
Don’t forget VAT
These commission prices usually include VAT. (You should double-check this with your estate).
Your estate agent should tell you their commission rate before you agree to sell your house with them.
If they hide this information, you should be very cautious.
How much commission do online estate agents charge?
Each online estate agency charges in a different way. It is a still-developing part of the market.
However, most of the largest online estate agencies generally do not charge commissions.
Instead, they charge a flat rate that does not change regardless of the price of the house. This amount is due once your sale completes.
Online estate agencies can charge this way because they have fewer overheads (such as office rental costs). This means they can keep their prices down.
Some online estate agencies still charge a commission on the sale. This is usually a lower rate than the average estate agency.
Check with the company in question to clarify this.
Can I negotiate an estate agent’s fee?
Commission will sometimes be negotiable. It depends on the company.
Smaller estate agencies have less centralised and rigid pricing structures, so they may cut you a deal.
However, large organisations with dozens of offices will rarely be allowed to make individual exceptions.
There’s very little harm in asking about negotiating the fee. The worst they can do is say no.
Do all high street estate agents charge commission?
Most high street estate agencies charge a commission, although not all of them. You will find some exceptions to the rule.
Most estate agencies that avoid commission are not high street agencies. They usually operate online. Two popular examples are Purplebricks and Sold.co.uk.
When do I pay commission to an estate agent?
Most estate agencies have a ‘no sale, no fee’ policy. This means you don’t pay the fee until after the sale.
You should confirm this with the estate agent. Companies that make you pay up-front are not always trustworthy.
Your conveyancer should handle this transaction. They will take the money out of your property earnings and transfer it to your estate agent.
How can I avoid paying fees on my house sale?
You can avoid paying estate agent fees by avoiding using an estate agent.
Sell your house privately
Firstly, you can sell the property yourself. This means you avoid estate agents and handle the entire process independently.
This includes marketing, hosting viewings, negotiating prices, and liaising with other people in the chain.
Although possible, this option is challenging because you must find a buyer yourself.
You can list your house through online platforms, put a ‘For Sale’ sign out the front, and perhaps sell to someone you know.
You will still need to pay conveyancing and removal costs using this method.
Use a cash buying company
A second way to avoid fees is by using a cash buying company. These organisations offer a below-market rate for your house.
This is typically around 80% of its market value. In return, you won’t be charged a commission and they will cover your conveyancing costs.
This method allows you to sell your house extremely quickly, for free. Just make sure that the company you use is a legitimate cash buyer.
